Profit From A Stock Market Crash – Be In Cash

How NOT being Invested in the Stock Market can be Profitable. Using the Cash Position to your Advantage is a Powerful Strategy to Profit from a Crash

How can NOT being invested in the stock market be profitable?

Surely, if you leave your money on the sidelines and do not invest in stocks all the time, how can you make a profit? Using the cash position to your advantage is a simple yet incredibly powerful strategy to make money from a downturn.

There are some very important questions you need to ask yourself.

Are you always in the market? By this I mean are you always invested in stocks?

Do you think you will maximize your profit if you are always invested?

Are you scared of missing some profit if you do not stay in the trade?

The Independent Investors Advantage – Cash

One key advantage of being an independent investor is that we can pull our money out of stocks and move into cash whenever we want to and we do not have to answer to anyone but ourselves. This is an important advantage over large institutions, who have to leave the bulk of their cash in because of the manifesto they have with their investors. There are certain times where having your entire portfolio invested in stocks does not make sense.

How Do You Know When a Stock Market Crash is Coming?

This system is backtested over the last 90 years and provides a clear foolproof way to know that a stock market crash is about to happen.

It helps me sleep better at night.

Your default position should be cash. Always.

From this position, you buy stocks and hopefully reap the benefits. When things start looking bleak – Sell and move to cash.

There is no shame in being in cash.

Most experienced investors trading their own account use this to their advantage. Knowing everything about Technical Analysis and Fundamental Analysis will not help you at all if you refuse to move to cash when the market enters a serious bear phase. Money management and preservation of your capital is critical. If you risk too much and lose too much you will not have enough money to invest when the going gets good.

The more you lose in a downturn the more you have to make on the upturn just to break even.

An important stock market lesson

Remember this.

Example 1. The Strategy of 80% of the people who fail to beat the market.

2 COMMENTS

You have got to admit though. It’s tough not getting involved when stocks are crashing all around you. Some shares are moving up and down by 20-30% in a week and there is so much money to be made. I suppose it just depends how prolonged the crash is. We’ll see what happens with the Euro!

Screening or scanning for stocks is one of the most important elements in your investing strategy. Whether you are a day trader or a...

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Liberated Stock Trader est. 2009 is a company committed to honest and unbiased investing education to help you become a liberated, free thinking, independent investor. We develop high quality free & premium stock market training courses & have published multiple books. We also thoroughly test and recommend the best investing research software, books, brokers and have partnerships with companies whose products we love. These partnerships help fund the business.

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